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Rent Ceilings in New York City

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Capstone Paper: Rent Ceilings in New York City
Rent control was introduced in New York City after World War I. “Rent-controlled tenants live in buildings built before 1947 and have lived there continuously since 1971. They tend to be seniors on fixed incomes” (Thorbourne, 2015, para 1). City officials believed that the rapid rise in demand for rental units would drive up rent prices therefore price ceilings were instituted. This created a shortage in supply because it was not profitable for builders to continue construction where rent was regulated. Furthermore, a tenant is legally allowed to stay until they died or the agreement could be passed to a cohabitant that resided there for at least two years (Mceachern, 2014, p. 86). This causes an issue for landlords in the sense that they are not remaining profitable because rent controlled prices are dramatically lower than the free market. Landlords often take extreme measures in trying to catch tenants violating their lease so that they can terminate the binding agreement. By terminating the lease the landlord may not be bound by rent control once the tenant vacates. The below paragraphs will discuss the following questions associated when a price ceiling is imposed below the equilibrium level:
1. What happens to the quantity and quality of housing available?
2. What happens to the quality of housing and why?
3. Who benefits and loses from rent control?
4. How do landlords of rent-controlled apartments try to get tenants to leave?
What happens to the quantity of housing available?
Let us assume that during normal conditions supply and demand equilibrium level is $1,200 a month for rent. However, the government decides to put a price ceiling at $1,000 a month for rent. By reducing the price below the equilibrium level will drive up demand and in turn significantly reduce the amount of supply for rent controlled

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